IDB releases first regional survey about Latin American and Caribbean banks’ sustainability

Nov 15, 2011.IDB. Miami.– The Inter-American Development Bank (IDB) released today the first regional survey about environmental, social and corporate governance sustainability of banks in Latin America and the Caribbean.

The survey, launched today during the Federation of Latin American Banks (FELABAN)’s annual meeting, showed that financial institutions in Latin America and the Caribbean have strong standards for corporate governance but more improvements are needed in terms of environmental and social sustainability.

Ninety-eight percent of the 55 financial institutions surveyed in the region have policies in place to combat money laundering and 93 percent have a policy to fight bribery and corruption. Yet, in terms of environmental sustainability, only 62 percent of those surveyed in the region incorporate environmental and social standards for their credit and loan business and only 36 percent have initiatives to reduce direct greenhouse emissions.

"This survey is a valuable benchmark and management tool for banks to measure their progress in terms of sustainability,” said Daniela Carrera-Marquis, Chief of the IDB Financial Markets Division at the Structured and Corporate Finance Department. “The IDB is committed in developing financial markets in the region in a sustainable manner and this survey will allow us to better tailor our products and services to meet the needs of our clients and their end users, maximizing our development impact.”

The survey, carried out among banks from 19 countries, also showed that 42 percent of the institutions surveyed have initiatives to increase workforce diversity and 55 percent have initiatives to promote access to financial services to minorities.

Twenty-two institutions from Mexico, Central America and the Caribbean, 15 from Andean Countries and 18 from the Southern Cone participated in the survey, which contained 46 questions divided in three topics: corporate governance, environmental and social sustainability.

Top-ranked banks

The survey is complemented by a study produced by Sustainalytics, a world leader in research and analysis of environmental, social and corporate governance issues, which has created a ‘sustainability rating’ that allows each bank to see their position over its competitors in any of these three aspects.

Following this methodology, the five banks in the region that are better positioned when it comes to environmental and social responsibility and corporate governance are: Grupo Financiero BBVA Bancomer, Bancolombia S.A., Banco Santander (Brazil), Banco de Galicia y Buenos Aires S.A. and HSBC Latin America Holding Limited.

“This project provides a unique opportunity to examine the financial sector in Latin America and the Caribbean as a whole, visualize trends and identify areas for improvement,’’ added Gema Sacristán, IDB beyondBanking program coordinator. “It also offers an opportunity for other banks to learn from the successes and adapt such best practices moving forward. We hope this study sends a clear message to the region about the new role for sustainability in financial intermediaries.”

The study is part of the IDB’s beyondBanking program aimed at promoting sustainability and stressing the competitive advantages that result when sustainable practices are mainstreamed in traditional bank management.

About beyondBanking

Banking on global sustainability is a program developed by the Financial Markets Division of the IDB’s Structured and Corporate Finance Department that seeks to promote sustainable environmental, social and corporate governance principles among Latin American and Caribbean financial intermediaries through financial and technical cooperation.